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09 Dec The ROI of Growing Up

(By Mike Raftery)

IT project investment is a strange animal. The total payback may not always be apparent since the impact of the investment is not as black and white as say, a new production line or some new R&D project. The benefits however, are all around you. A good IT project might not have an easily quantifiable payback, but at least it won’t do any damage. A great project will pay back as it makes every process it touches that much better.

There becomes a point when companies need to grow up. Could Exxon or Walmart run on spreadsheets? Possibly, but the monthly close of the books would probably take a month and a half, the weekly supply plan would take two weeks, and there would be an army of people emailing spreadsheets and melting down the Outlook servers. At some point, Exxon had to grow up, and every great company has had that same inflection point in their history. Recognizing that point, and even better yet, anticipating that point, is a huge accelerator for the entire organization. Apologies for the consultant speak, but the synergy of the improvements of a “grown up” IT project adds up to much more than the ROI of each specific project could deliver on its own.

People

Give your people a break. Sure, you hire good people that can work miracles with excel and access, but is that the best way to spend their working hours? Sure, you can get them to build a report that gets you what you need; excel is great for that. However, every minute spent building the report is one less minute spent analyzing it, one more minute until they find opportunities and one more minute before you realize the advantages of those opportunities.

Getting systems that do the heavy lifting for you is a huge accelerator for making better business decisions. It also has the softer benefit of removing the burden of doing that heavy lifting from your best people. Removing the busy work will make for a more enriching workday, and motivated employees that can now make a difference rather than grind away at a task. It might feel like a small thing but do not underestimate the soul crushing ability of a regular excel reporting assignment to an employee’s morale.

Processes

Anytime IT projects come into play, the processes that feed them should get a well needed tune up. It’s a great opportunity to take a break, look at the holistic process and make it just a little bit better.   More often than not, especially in growing companies, processes happen by accident. Things happen quickly and need immediate answers. Since necessity is the mother of invention, people get creative. Workarounds become standard practices, and standard practices become requirements.

IT projects, especially in supply chain, can be a good time to sharpen the saw when done right. Drilling into requirements and applying best practices where applicable can result in unanticipated benefits from an IT project. This is a critical inflection point in the growth of an organization. At this point, you can either institutionalize the workarounds or get better and implement a process that works to enable efficiencies and deliver value. It’s not easy, and requires the organization to pause and take a bit of inventory around who they are and more importantly who they want to be.

Technology

If an IT project is planned for what you are doing today, it will be obsolete by the time you go live. Sure, a workaround here and there might be tolerable now, but does it fit into the overall business plan? Invest in your technology alongside your business plan. You do not want to finish a project, and then turnaround and ask to start another one. Leverage the momentum and infrastructure around a project to include the scope you need to grow. One project with a few extra scope items is going to be quite a bit cheaper than two separate projects with all the overhead that entails.

Investing in the latest and greatest today will give you an advantage over the competitors initially, and it allows for a prolonged system lifecycle to sustain the ROI of the investment on the backend. Sure, a project that uses dated technology or hardware might be a deal up front but you will realize significantly less from your investment over the duration.

IT projects, especially supply chain IT projects, are notoriously difficult to quantify. There are so many touch points across an organization it becomes impossible to tell what is a direct result of an IT project and what is coincidence. At some point it doesn’t matter. Good IT organizations, and well-executed projects, open up opportunities across the organization. Some are intended and some are accidental. Realizing that business is ever changing, and we’re never really all grown up, is reason enough to stay ahead of the curve. Anticipating these needs and investing ahead of time will present unintended benefits across the organization, while waiting and reacting will result in missed opportunities that handicap future growth. Which side do you want to be on?

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